Pop Mart’s stock is sliding, and the once-unstoppable Labubu hype in China seems to be losing steam. When something gets too popular, it often fades just as fast—think fidget spinners or Tamagotchis. With shares continuing to drop, the big questions are: Has Pop Mart peaked? Is Labubu yesterday’s news? And should you short the stock or scoop up the dip? Let’s dive into the data, weigh the risks, and map out a shorting strategy that fits.
The Decline: What’s Driving Pop Mart Down?
Pop Mart, the Chinese toy giant behind the “blind box” craze, has been a darling of collectors and investors alike. But the cracks are showing:
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Stock Slump: The stock has shed over 16% from its recent highs, hovering around 235 HKD. That’s a steep fall for a company that once seemed untouchable.
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Labubu Hype Fading: Resale prices for Labubu toys have crashed nearly 40% after restocks flooded the market. Scarcity drove the craze; oversupply might kill it.
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China’s Regulatory Gaze: State media has slammed “blind box” toys for encouraging impulsive spending, especially among kids. New rules could choke Pop Mart’s domestic engine.
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Analyst Cold Shoulder: Morgan Stanley yanked Pop Mart from its focus list, swapping it for a less flashy insurer. That’s a vote of no confidence.
It’s a classic story: explosive growth, massive hype, and now a reality check. But is this the peak—or just a speed bump?
The Bull Case: Why Pop Mart Might Bounce Back
Before you bet against Pop Mart, consider the flip side. This isn’t a one-hit wonder on its last legs:
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Global Gains: Overseas sales have outpaced China’s, rocketing 373% year-over-year in 2024. Pop Mart’s not just a local fad—it’s a worldwide player.
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Revenue Rocket: The company’s pulling in 7.97 billion yuan domestically, and analysts see 50%+ growth in 2025. New toys and markets could keep the cash flowing.
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IP Machine: Labubu’s not the only trick up their sleeve. Pop Mart’s knack for churning out viral characters could reignite the spark.
The stock’s taken a hit, sure, but its valuation’s come down from nosebleed levels (100x earnings) to something more digestible. If the bulls are right, this dip’s a buying opportunity.
Has Pop Mart—or Labubu—Peaked?
Here’s the crux: Pop Mart’s peak depends on Labubu’s staying power and China’s next move. Labubu’s resale plunge suggests the hype’s deflating—when the secondary market tanks, collector fever often follows. China’s regulatory drumbeat could cap domestic growth, too. But Pop Mart’s global pivot and new product pipeline mean it’s not out of ammo yet.
My take? Labubu’s probably crested in China—hype doesn’t last forever when supply catches up. Pop Mart as a company, though, might not be done. It’s at a crossroads: fade into obscurity or reinvent itself. The stock’s fate hangs on which path it takes.
Short It or Buy It? Your Options
Shorting Pop Mart: How to Play the Downtrend
If you’re betting on a bigger drop, here’s how to short it:
Quick Hit: Technical Short
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Entry: Below 230 HKD—watch for a break of support.
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Target: 200 HKD, near the 50-day moving average.
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Stop-Loss: 245 HKD to keep losses tight.
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Why: Momentum’s downward, and a breach of 230 HKD could accelerate the slide.
Big Bet: Fundamental Short
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Entry: Post-earnings or if regulations tighten.
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Target: 180 HKD, a 20%+ drop.
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Stop-Loss: 260 HKD, in case growth surprises.
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Why: A structural slowdown—regulatory or hype-related—could tank the stock long-term.
Smart Hedge: Pairs Trade
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Move: Short Pop Mart, go long Miniso (a diversified rival).
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Why: Miniso’s less tied to one fad, cushioning you if Pop Mart defies gravity.
Risks: Shorting’s tricky—Pop Mart’s growth could rebound, or dip-buyers could step in. A tight stop-loss is non-negotiable.
Buying the Dip: The Contrarian Play
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Entry: Around 220 HKD, a solid support level.
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Target: 270 HKD if the stock recovers.
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Why: If you trust Pop Mart’s global story, this pullback’s a steal.
The Numbers: Stock Snapshot
Here’s a table to size up Pop Mart’s situation:
And here’s what a chart might show: a sharp climb to 280 HKD, a jagged 16% drop to 235 HKD, with support at 230 HKD and 220 HKD looming below.
My Play: Short with Caution
Pop Mart’s decline smells like a peak in China’s Labubu mania, but its global muscle keeps it in the game. I’d lean toward a technical short—enter below 230 HKD, aim for 200 HKD, and cap risk at 245 HKD. It’s a quick, low-exposure way to ride the wave down. If you’re bolder, wait for regulatory news and go bigger. Rather buy? Hold off for 220 HKD and bet on the long haul.
What’s your move—short the hype or buy the future? Drop your take below!
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